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Businesses See Fuel Surcharges Fading Away

OCEAN CITY — Now that consumers can speak of astronomical fuel prices in the past tense, can they say the same for those pesky fuel surcharges?

When fuel surcharges started popping up on invoices of restaurant food orders all over the country, sometimes adding 4 percent to 7 percent to the bill itself, many businesses could understand the rising costs for distribution companies to operate based on the almost $4 a gallon prices, thus justifying the need for a surcharge.

Restaurants were not the only ones feeling the pinch of fuel surcharges, as cab companies started tacking on a fares for riders, including a $1 fuel surcharge that was granted in October and extended through January 2009 by City Council.

Yet, when the price of a barrel of oil started to plummet from the record $140 per barrel to less than half of that in a month’s time, many consumers started to wonder how long the fuel surcharge would last.

Michael Priola, executive chef at Nantuckets Restaurant in Fenwick Island, has been a huge opponent of the surcharge and told The Dispatch that the charges have finally started to come off his weekly bills.

“They started coming off the bills within the last two weeks and some companies you had to complain before they would take it off,” said Priola. “It was starting to get to a point when gas was at a $1.50 a gallon that they couldn’t justify putting a $6 fuel charge per order.”

Some municipalities have implemented a fuel surcharge for trash pickup, although Ocean City did not fall into that category, according to Public Works Director Hal Adkins, who said that Ocean City has never added such a charge to trash pickup. With that said, and the price of gas continuing to fall, Adkins along with City Manager Dennis Dare have been making a number of cuts to fuel usage amongst town vehicles, thus saving money on gas, rather than charging consumers extra for what it used.

Sysco, the nation’s largest food distributor that boasted over $37.5 billion in gross revenue in 2008, just recently took off their fuel surcharge, according to a few local proprietors who asked not to be named, who hinted that criticizing the company for a $6 fuel charge wasn’t “smart business” when compared to all that the company does for its customers. Pocomoke-based Lankford-Sysco is Ocean City’s largest food distributor and declined to comment on the surcharges.

Priola said that in the summertime, a busy restaurant could spend a few hundred dollars a week in surcharges, and with restaurants seeing dwindling clientele and rising costs of the food itself, the surcharge ended up leaving a bad taste in more than a few mouths.

“It’s kind of a slap in the face. No one liked the high fuel prices, but those companies used to absorb that as a cost of doing business,” said Priola.

Priola said the rising price of food has been an ongoing concern, but added that certain high-priced items are actually more inexpensive than ever in this new economic climate.

“It’s cheaper to eat lobster right now than it is to eat crabs,” said Priola, “The companies have to move it, but no one is treating themselves to lobster dinners right now. So, that won’t necessarily equate to lower menu prices, but you will see more specials being done with lower lobster and beef prices.”

As for cab fuel surcharges, Mayor Rick Meehan said that the $1 per ride surcharge was granted and later extended into 2009 by City Council because “they waited until prices had been pretty high for sometime before they came to us and asked for help,” said Meehan.

The City Council will reevaluate the need for the $1 cab surcharge sometime in the early part of 2009, and if it follows suit, it might just be another surcharge that finally is running out of gas.